Analyzing Coca-Cola Consolidated (NASDAQ:COKE) and Constellation Brands (NYSE:STZ)

Coca-Cola Consolidated (NASDAQ:COKE) and Constellation Brands (NYSE:STZ) are both large-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Coca-Cola Consolidated and Constellation Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coca-Cola Consolidated	0	0	1	0	3.00
Constellation Brands	5	7	12	0	2.29

Constellation Brands has a consensus price target of $153.09, indicating a potential upside of 16.62%. Given Constellation Brands’ higher possible upside, analysts clearly believe Constellation Brands is more favorable than Coca-Cola Consolidated.

Dividends

Coca-Cola Consolidated pays an annual dividend of $1.00 per share and has a dividend yield of 0.5%. Constellation Brands pays an annual dividend of $4.12 per share and has a dividend yield of 3.1%. Coca-Cola Consolidated pays out 13.3% of its earnings in the form of a dividend. Constellation Brands pays out 37.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Coca-Cola Consolidated has increased its dividend for 2 consecutive years and Constellation Brands has increased its dividend for 5 consecutive years. Constellation Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Coca-Cola Consolidated and Constellation Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Coca-Cola Consolidated	7.15%	-1,041.59%	13.71%
Constellation Brands	19.57%	24.75%	9.54%

Earnings & Valuation

This table compares Coca-Cola Consolidated and Constellation Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coca-Cola Consolidated	$7.23 billion	1.94	$570.58 million	$7.54	27.90
Constellation Brands	$9.76 billion	2.28	$1.69 billion	$11.15	11.77

Constellation Brands has higher revenue and earnings than Coca-Cola Consolidated. Constellation Brands is trading at a lower price-to-earnings ratio than Coca-Cola Consolidated, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

48.2% of Coca-Cola Consolidated shares are owned by institutional investors. Comparatively, 77.3% of Constellation Brands shares are owned by institutional investors. 0.0% of Coca-Cola Consolidated shares are owned by company insiders. Comparatively, 12.2% of Constellation Brands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Coca-Cola Consolidated has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Constellation Brands has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500.

Summary

Constellation Brands beats Coca-Cola Consolidated on 12 of the 17 factors compared between the two stocks.

About Coca-Cola Consolidated

Coca-Cola Consolidated, Inc., together with its subsidiaries, manufactures, markets, and distributes nonalcoholic beverages primarily products of The Coca-Cola Company in the United States. The company offers sparkling beverages; and still beverages, including energy products, as well as noncarbonated beverages comprising bottled water, ready to drink coffee and tea, enhanced water, juices, and sports drinks. It also sells its products to other Coca-Cola bottlers; and post-mix products that are dispensed through equipment, which mixes the fountain syrups with carbonated or still water enabling fountain retailers to sell finished products to consumers in cups or glasses. In addition, the company manufactures and distributes various other beverage brands that include Dr Pepper and Monster Energy. It sells and distributes its products directly to grocery stores, mass merchandise stores, club stores, convenience stores, and drug stores; and restaurants, schools, amusement parks, and recreational facilities, as well as through vending machine outlets. The company was formerly known as Coca-Cola Bottling Co. Consolidated and changed its name to Coca-Cola Consolidated, Inc. in January 2019. Coca-Cola Consolidated, Inc. was incorporated in 1980 and is headquartered in Charlotte, North Carolina.

About Constellation Brands

Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company provides beer primarily under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook’s California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson’s Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.